Jayshree Ramakant ... vs Municipal Corporation Of Greater ...
2016 Latest Caselaw 2484 Bom

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                     IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                         ORDINARY ORIGINAL CIVIL JURISDICTION
                     PUBLIC INTEREST LITIGATION (L) NO. 51 OF 2016




                                                                                      
    Jayshree Ramakant Khadilkar-Pande                                   ...       Petitioner




                                                              
               vs.

    Municipal Corporation of Greater Mumbai                  ...      Respondents




                                                             
    and 7 Ors.
                                             .....
    Mr. Sariputra P. Sarnath i/b. Vinamra Kopariha for the Petitioner.
    Mr.Anil Singh, Addl. Soliciter General a/w. Mr.Anil Yadav, Mr.J.J.Xavier and




                                                  
    Ms.K.M.Mastakar for Respondent no.1.
    Mr.Anurag Gokhale, AGP for Respondent no.2.
    Dr.Abhinav Chandrachud a/w. Mr.S.D.Shetty a/w. Ms.Kavita Anchan a/w.
                                    
    Mr.Kunal Chheda i/b. M/s. M.V.Kini & Co. for Respondent no.3.
    Mr.Mahesh Londhe i/b. M/s.Sanjay Udeshi & Co. for Respondent no.4.
    Mr.Amol B a/w. Mr.Chirag Dave a/w. Mr.Vaibhav Charalwar i/b.Legasis
                                   
    Partners for Respondent no.5.
    Mr.G.W.Mattos f
    or Respondent no.8.
                                             .....
        

                                          CORAM : B.R. GAVAI &
                                                  DR. SHALINI PHANSALKAR-JOSHI, JJ.

DATE : 27 MAY, 2016 VACATION COURT

P.C.:

1. Issue notice returnable on 9th June, 2016. Heard Mr.S.P.Sarnath, the learned Counsel for the petitioner, Shri Anil Singh, learned Senior Counsel

appearing on behalf of respondent no.1, Mr. Mattos on behalf of respondent no.8, Dr.Chandrachud for respondent no.3 and Mr.Londhe for respondent no.4.

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2. The present PIL is filed by the petitioner contending therein, that though the Municipal Commissioner of Bombay Municipal Corporation has prima facie found respondent nos. 3 to 7 having indulged into serious

irregularities and though he has directed taking action against them and though FIR are registered against them, the Municipal Corporation as well

as respondent no. 8 has awarded various contracts in their favour.

3. Mr.Singh, learned Senior Counsel appearing on behalf of the Municipal Corporation submits that as a matter of fact, the contracts were concluded prior to the issuance of Show Cause Notice to the respondent

Contractors and as such in view of the rules framed by the Municipal Corporation named as "Rule Governing the Registration of Contractors for

Civil, Mechanical, Electrical and Electronics Engineering Works - 2015", the contracts which are already concluded, cannot be effected on account of

the action that is proposed to be taken by the Municipal Corporation against the Contractors.

4. The learned Counsel relying on the paragraphs 26 to 31 of the

affidavit in reply submits that the works for which the contracts are already awarded, are of emergent nature and no interference by this Court at this stage should be made, in as much as great inconvenience will be caused

to the citizens at large if Municipal Corporation is prevented from going ahead with the work. It is submitted that one of the contracts is related to the construction of bridge which is closed from 2012 and on account of non existence of the said bridge various casualties have also taken place.

5. Mr.Singh also relying on the guidelines of the CVC, submits that the contract concluded, before bid opening shall not be effected by the order of suspension of registration.

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6. Dr.Chandrachud, learned Counsel appearing on behalf of respondent no.3 relies on the judgement of the Apex Court in the case of Gorkha Security Services v. Government (NCT utaof Delhi) & Ors.[(2014) 9

SCC 105] in support of the contention that the black listing would amount to civil death of a contractor. It is submitted that as of now no order of black

listing is passed and as such unless an order on black listing is issued, the respondent no. 3 cannot be prevented from participating in the bids. Dr.

Chandrachud also relies on the judgement of the learned single Judge of Kerala High court in the case of Ambili B vs. State of Kerala [2011 SCC OnLine Ker 557] and the Division Bench of the Punjab and Haryana High

Court in the case of KCC Buildcon Private Limited v. State of Haryana [2014 SCC onLine P&H 11393].

7. Shri Londhe, learned Counsel appearing on behalf of respondent

no.4 on the basis of the contract has already spent a huge amount for the purpose of materials and any order at this stage would seriously prejudice the interest of the said respondent.

8. The perusal of the material placed on record would reveal that a complaint was received by the Municipal Corporation, complaining therein that contractors to whom works were alloted by the Municipal Corporation

had committed serious irregularities.

9. The endorsement on the file by the Municipal Commissioner on 18th April, 2016 would reveal that an inquiry committee was constituted and

report was called. From the perusal of the report, the Municipal Commissioner found that though general responsibility was fixed, and though time would be required for fixing individual charges, he directed that in view of the gravity of the irregularity, a first stage responsibility and action that needs to be taken should be enumerated. He therefore directed to put

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up a proposal for action to be taken. It appears that upon direction issued by the Municipal Commisioner, Additional Municipal Commissioner (W.S.) put up proposal on 20th April, 2016 for taking action in pursuance.

10. It appears that in pursuance to the aforesaid direction issued by the

Commissioner of Municipal Corpration, Mumbai the Additional Municipal Commissioner (WS) put up a proposal before the Municipal Commissioner

on 20th April, 2016. Upon perusal of the report, the Municipal Commissioner put up his note on 25th April, 2016. In the note it is stated that the inquiry report had brought out serious irregularities in the execution of the road

works in MCGM. It further states that from the report it is concluded that in all the 34 roads taken up for inspection, irregularities of serious nature are

found and all these contractors are found to be guilty. He has further observed that not only that, but even third party auditors have completely

failed in their duties and are involved in participating in the irregularities. It further states that huge irregularities could not have taken place without the active and passive involvement of Senior Official and Officers of ranks.

11. The Municipal Commissioner therefore proposed to take action

against all guilty. He has also observed that it is also necessary to take care to see that public money is spent with due care.

12. The Municipal Commissioner therefore vide office noting dated 26th April, 2016 has issued following direction:

1. The Hon. C.E.(Roads) Shri A.Pawar should be placed under suspension forthwith. The C.E. (Vigilance) has already been suspended in another case. DMC (GA) to take action.

2. The responsibility on other officials be fixed and action of suspension and other disciplinary action be taken in

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stages. DMC(GA) to co-ordinate.

3. The process of black listing /de-registration of

contractors and Third party auditors to begin immediately. The action will be taken by Director (E.S.P.) by following due

process of law.

4. In view of the magnitude of public money involved and the large scale irregularity FIR be filed forthwith against Contractors and Third Party Auditors (TPA) by C.E.(Roads) in

consultation with DMC(GA).

The tender documents and tender procedure need to be revamped. The C.E.(Roads) under supervision of the Addl

M.C.(E.S.) will take up work of further revising the tender documents. Further, a stringent system will be put in place to ensure quality of work being executed.

6. It is also observed that the road plan drawn up has included roads that do not need repairs or upgradation. The Addl. MC(E.S.) will take up work of viewing the road works

plan based on strict technical criteria.

7. The AMC (W.S.) to draw up a schedule for the remaining roads in view of the fact that the first stage of

enquiry has shown serious irregularities.

13. The perusal of the aforesaid, would reveal that the Municipal Commissioner has directed the process of black listing / de-registration of the contractors to be undertaken immediately. He has further directed that

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FIR should also be filed forthwith, against the Contractors and Third party auditors. In pursuance to the directions issued by the Municipal Commissioner the FIR's are lodged on 27 th April, 2016. However, it is

surprising to note that though FIR's are lodged on 27 th April, 2016 i.e. within a period of 48 hours of the Municipal Commissioner issuing directions for

action to be taken, it took 21 days for the Subordinates in the Municipal Corporation to issue Show Cause Notice to the Contractors for black listing

and for suspension of their registration.

14. Mr.Singh heavily relies on page 113 of the paper book. The perusal

of the note would reveal that the work orders have been issued to all these contractors on 6th May, 2016 i.e. after the period of 11 days from the date on

which Municipal Commissioner had directed action to be taken against the Contractors. It will be appropriate for the Municipal Commissioner to

examine, as to why it took 21 days from the date on which he has issued directions to issue Show Cause Notice and suspension of the registration of the Contractors. When an FIR was registered within 48 hours, there is no

reason as to why Show Cause Notice and orders of suspension of

registration could not have been issued along with that.

15. We leave it to the Municipal Corporation to consider as to whether

the work orders were issued on 6th May, 2016 and Show Cause Notice were issued on 16th May, 2016 with some ulterior motive, so as to give protection to the contracts so that they can take an umbrella of the ground that Contracts are concluded on 6th May, 2016.

16. It is further to be noted though Standing Committee has passed resolution on 4th May, 2016 i.e. after a period of almost 10 days after Municipal Commissioner had directed action to be taken and after a period of 8 days from the date on which FIR was registered.

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17. In so far as the reliance of Shri Singh on clause 8.1.2 of the said rules is concerned, we find that the reliance is misplaced. It would be relevant to refer to the first sentence of clause 8.1.2 of the said rules.

8.1.2. Suspension of Registration Suspension of Registration is meant that no new

tender copy will be issued to the contractor/s and he will not be considered for award of works for the bids

in process.

The perusal of the aforesaid sentence would clearly reveal that once

registration is suspended no new tender can be issued to the contractor and further that such contractor will also not be considered for award of

works for the bids in process. Had the suspension taken place immediately after the direction were issued by the Municipal Commissioner, the bids of

the contractor in question even in process could not have been considered.

18. As already discussed here in above the dates speak for themselves.

The Municipal Commissioner issued direction on 26 th April, 2016, FIR is

registered on 27th April, 2016, thereafter 21 days period is given to take action of suspension and in the mean time on 4th May, 2016 the Standing Committee passes a resolution and work orders are issued on 6 th May,

2016.

19. It is needless to state that all persons holding powers to distribute public larges those hold the power in Public Trust. The person exercising

the powers cannot be expected to exercise their powers at their whims and caprices. It cannot be believed that the Standing Committee was not aware about the direction issued by the Municipal Commissioner on 25 th April, 2016, when it took decision to award contract in question on 4th May, 2016.

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20. In so far as the contention of Dr.Chandrachud that the order of black listing is order which invites serious consequences is concerned, there cannot be quarrel with the said proposition. By now it is well settled

principle of law that an order of black listing is in nature.

21. However, when the rules framed as the Corporation itself prescribe that on suspension of registration a contractor cannot be a,warded a

contract even if it is in process, such a rule cannot be ignored.

22. We are prime facie of the view that the process of suspension was

delayed with ulterior motive so that in the mean time the Standing Committee passes a resolution and work orders are issued so as to give

umbrella to the contractors of the concluded contract. At the cost of repetition the public authorities cannot be permitted to exercise their powers

to the detriment of public interest. The contractors who are prima facie found to be guilty in an inquiry conducted by the Corporation, of serious irregularities, prima facie could not have been awarded contract.

23. We are making it clear that since pleadings are not yet complete and since court is exercising jurisdiction in vacation, we are passing an ad- interim order for a short period so as to enable all the parties to complete

pleadings. However, we find that if we fail to pass an interim order at this stage it will give an excuse to the Contractors that they have already spent a huge amount and therefore would claim equities in the matter.

24. It is strenuously urged by Shri Singh that taking into consideration the urgency of undertaking the work, this Court should not interfere in the matter. A special reference in this regard is made to the Hancock Bridge constructed in the year 1879 and rebuilt in the year 1983. It is submitted that the said bridge is closed for heavy traffic from 14 th October, 2012. It is

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therefore submitted that if construction of the bridge is not permitted, it would cause great inconvenience to the public at large. It is to be noted that the said bridge is closed for a period of more than 3 ½ years. As

such heavens would not fall, if the work is stalled for few days. In any case it appears from the affidavit filed by the Corporation itself that the Division

Bench of this Court in PIL/141/2015 by order dated 6 th May, 2016 has itself recorded that the Municipal Corporation and authorities can construct a

temporary bridge with the assistance of the Indian army. In that view of the matter we find that contention raised in that behalf needs no merit.

25. In that view of the matter we are inclined to pass an ad interim order which shall operate for a limited period i.e. till the regular bench hears the

matter. Stand over to 9th June, 2016.

26. We therefore, by way of an ad-interim order grant stay to the contract award of the Bombay Municipal Corporation to respondent nos. 3 and 4.

27. We make it clear that while considering the rival submission for grant

of ad-interim relief we have only considered the factors which are relevant in the present petition and have not dealt with the larger issues as raised by the learned Counsel appearing on behalf of the contractors.

28. An authenticated copy of this order be supplied to all the learned Counsels appearing in this matter.

(DR. SHALINI PHANSALKAR-JOSHI, J.) (B.R. GAVAI, J.)